Tuesday, July 31, 2012

20120731 1805 FCPO EOD Daily Chart Study.

FCPO closed : 2980, changed : -25 points, volume : lower.
Bollinger band reading : pullback correction little downside biased.
MACD Histogram : recovering, seller reducing exposure.
Support : 2970, 2950, 2920, 2900 level.
Resistance : 3020, 3050, 3070, 3100 level.
Comment :
FCPO closed recorded loss with better volume exchanged. Soy oil currently trading lower after overnight closed firmer while crude oil price currently trading little higher moving sideways.
Relatively weaker export data released by 2 cargo surveyors pressed price lower amid sign of slowing down demand with seasonal picking up production in coming months.
Technical chart reading still calling a pullback correction little downside biased market development.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistant or strength with quick cut loss and profit target.

20120731 1741 FKLI EOD Daily Chart Study.

FKLI closed : 1633.5 changed : +5 points, volume : lower.
Bollinger band reading : correction range bound little upside biased.
MACD Histogram : turn upward, buyer in control.
Support : 1630, 1623, 1615, 1600 level.
Resistance : 1640, 1650, 1660, 1670 level.
Comment :
FKLI closed advanced higher with reducing volume traded with Aug contract doing about 3 point premium compare to cash market that declined marginally. Overnight U.S. markets retreated slightly lower and today Asia markets closed mostly higher while European markets currently maving mixed development.
Global markets traded mostly higher awaits news from ECB and U.S. Federal Reserve on possible moves to stimulate economic growth.
Daily chart technical study adjusted to suggesting a correction range bound little upside biased market development.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistance or strength with quick cut loss and profit target.

20120731 1721 Regional Markets EOD Daily Chart Study.

 DJIA chart reading : little upside biased with possible pullback correction.
 Hang Seng chart reading : side way range bound.
KLCI chart reading :  correction range bound little upside biased.

20120730 1632 Global Markets & Commodities Related News.

GLOBAL MARKETS: Asian shares rose on hopes for further stimulus from the European Central Bank and the U.S. Federal Reserve, both of which hold policy meetings this week, but scepticism about the long-term effectiveness of any ECB actions capped the euro. Financial spreadbetters expect Europe's stock indexes to open slightly higher, with the sharp three-day rally losing steam as doubts emerge on whether the European Central Bank will revive its bond buying programme to help lower borrowing costs of debt-stricken Spain and Italy. U.S. stocks finished mostly flat on Monday as investors paused following the best two-day run this year, with central bank meetings and a full load of U.S. economic data looming.

ECB on course to act strongly or disappoint mightily
European Central Bank President Mario Draghi must back up his pledge to do what it takes to protect the euro when the bank's policymakers meet on Thursday or else face deep disappointment from investors hungry for - and expecting - immediate action.

Major Asian exporters stumble on weak global economy
Major Asian exporters Japan, South Korea and Taiwan showed deepening signs of economic stress on Tuesday as Europe's sovereign debt crisis, a slowing China and sluggish activity in the United States weigh on global demand.

FOREX: The euro edged higher against the dollar but stayed off a recent three-week high, while the Australian dollar hit a four-month high, supported by expectations that major central banks may add more stimulus.

FOREX-Euro firmer vs dollar; Aussie rises on stimulus hopes
SYDNEY/SINGAPORE, July 31 (Reuters) - The euro edged higher against the dollar on Tuesday but stayed off a recent three-week high, while the Australian dollar hit a four-month high, supported by expectations that major central banks may add more stimulus.
"I think there are more options on the table than we can think of right now. There's a lot of anticipation after Draghi's comments," said Jesper Bargmann, Asia head of G11 spot FX for RBS in Singapore.

June commods index investments snap 3-mth decline -CFTC
July 30 (Reuters) - Investment in commodity indexes rose in June, snapping a three-month decline, as renewed hopes for a solution to the euro zone crisis boosted most risk assets, figures from the U.S. Commodity Futures Trading Commission showed on Monday.
In its first monthly data showing an uptick in commodity market positions since February, the CFTC said the value of net long index investments rose by $6.8 billion, or nearly 4 percent, to $190.8 billion in June.

Australian banks to step up agricultural financing -ANZ
Australian banks will step up to fill the gap in financing agricultural firms in Asia left by the withdrawal of European banks from the region, the deputy chief of Australia and New Zealand Banking Group  said.

GRAINS: Chicago soybeans edged lower, giving back some of the previous session's strong grains, while corn was little changed following a rally as the worst drought since 1956 causes more damage to crops in the U.S. grain belt.

Japan to export less diesel, jet fuel in Aug on supply constraints
Japan will export up to 2.4 million fewer barrels of diesel and jet fuel in August compared with July, and exports could decline further in the months ahead as refinery outages and maintenance curbs production, keeping market premiums high, industry sources said on Tuesday.

OIL: Brent crude slipped towards $106 per barrel as caution among investors grew that any fresh stimulus measures coming from central bank meetings in the United States and Europe might not be enough to revive their stuttering economies.

China may revive tax rebates to bolster struggling steel sector
China may revive tax rebates to bolster the country's steel sector hit by slumping profits and inventories that have ballooned to levels enough to build hundreds of Beijing's National Stadium.

COLUMN-Even tin can't escape demand fears
LONDON, July 30 (Reuters) - The price of tin  traded on the London Metal Exchange (LME) collapsed last week to a one-year low of $17,125 per tonne.
It was a typically brutal move, highlighting once again how the lack of liquidity in one of the LME's smallest-volume contracts can translate into extreme volatility.

Indian steel makers double pellets imports in May
MUMBAI, July 30 (Reuters) - Imports into India of iron ore pellets, used in making steel, more than doubled in May to 174,319 tonnes as a partial mining ban in southern Karnataka state hit supplies, an industry body said.
Production in India, once the third-biggest global supplier of iron ore, has been hit as the government and state authorities raise taxes and freight rates to try to curb exports and retain supplies for domestic use.

China steel mills step up maintenance in bid to curb output
SHANGHAI, July 30 (Reuters) - China's small- and medium-sized steelmakers are stepping up maintenance in an effort to cut production and stem losses from a slump in steel prices and a surge in inventories, a move that could further pressure prices of their raw material, iron ore.
With no sign of a quick demand recovery in sight, a growing number of mills in the world's largest steel-producing nation have begun idling some capacity after having held output near record levels over the past few months.

 China says iron ore prices abnormally high versus steel products
BEIJING, July 31 (Reuters) - Iron ore prices are still abnormally high compared to steel products, an official with the China Iron & Steel Association (CISA) said on Tuesday.
Financing costs for the association's members, comprising 78-80 medium and large-sized steel mills, rose 37 percent in the first half of this year from a year earlier, Zhang Changfu, CISA's vice chairman told reporters in Beijing.

China steel industry profits plummet - CISA
BEIJING, July 31 (Reuters) - Profits at China's steel mills fell by 96 percent in the first half of 2012 compared with the year before, the China Iron and Steel Association, which represents the country's largest mills, said on Wednesday.
Many mills, especially the larger ones, are struggling as steel prices dive just as expensive upgrades commissioned during China's decade of booming steel demand are coming online.

Chile June copper output up 5.6 pct at 452,690 tonnes
SANTIAGO, July 30 (Reuters) - Chile, which provides about one-third of the world's copper, produced 452,690 tonnes of the red metal in June , up 5.6 percent from the same month a year earlier, the government said on Monday.
Copper output slipped 1.2 percent compared with May, when the world's No. 1 copper producer churned out 458,640 tonnes of it.

BASE METALS: Copper edged up underpinned by expectations the United States and Europe would introduce fresh easing measures this week, while traders were cautious ahead of China factory data that could offer new trading cues.

PRECIOUS METALS: Gold edged up ahead of the U.S. Federal Reserve's policy meeting later in the day, which is expected to shed light on the bank's stance on monetary stimulus, a key factor driving bullion prices. Spot gold inched up 0.2 percent to $1,623.56 an ounce.

METALS-Copper edges up, supported by stimulus hopes
SINGAPORE, July 31 (Reuters) - Copper edged up on Tuesday, underpinned by expectations the United States and Europe would introduce fresh easing measures this week, while traders were cautious ahead of China factory data that could offer new trading cues.
"Copper remains macro-driven and data point dependent, but the likelihood of any strong conviction trend emerging through the summer months seems pretty limited considering physical markets are all but dead," said Hong Kong-based commodities analyst James Luke of China International Capital Corporation.

PRECIOUS-Gold stays put as investors eye Fed meeting
SINGAPORE, July 31 (Reuters) - Gold held steady on Tuesday ahead of the U.S. Federal Reserve's policy meeting later in the day, which is expected to shed light on the bank's stance on monetary stimulus, a key factor driving bullion prices.
"Gold may come under some pressure in the run-up to this week's central bank meetings with the possibility of a dip below $1,610, but direction will depend almost entirely on policy decisions," ANZ said in a research note.

20120731 1058 Global Markets & Commodities Related News.

GLOBAL MARKETS-Shares pause, guarded stimulus hopes from ECB, Fed
TOKYO, July 31 (Reuters) - Asian shares paused on Tuesday as investors grew cautious ahead of monetary policy meetings by the European Central Bank and the U.S. Federal Reserve, with scepticism countering expectations for more stimulus steps to support fragile global economies.
"With the market at a crossroads between satisfaction and disappointment, investors have little choice other than to sit on the sidelines for now and see what the central banks do," said Kim Soo-young, an analyst at KB Investment & Securities.

COMMODITIES-Up on grain rally; oil, copper off on stimulus worry
NEW YORK, July 30 (Reuters) - Grain markets extended their blistering rally o n M onday as worries about crop damage from the worst U.S. drought in a half century helped pull commodities higher, despite a drop in oil and copper prices.
"Soybeans are shrinking before our eyes," said grains analyst Rich Feltes of RJ O'Brien in Chicago. "Rains over the weekend were less than expected and there are forecasts for dry weather during the three most critical weeks for soybeans."

U.S. bets on producing oil with captured CO2
(John Kemp is a Reuters market analyst. The views expressed are his own)
LONDON, July 30 (Reuters) - The United States can extract billions of barrels of otherwise unrecoverable oil by injecting carbon dioxide (CO2) underground and also needs to bury CO2, produced by its reliance on coal for power and industry, to fight climate change.
Until now, the CO2 used for recovering oil has been specially extracted from underground but the government is  working to use the lure of oil extraction to encourage the capture and storage of carbon produced from power stations.

OIL-Brent slips to near $106, economic woes trump lower OPEC output
NEW YORK, July 30 (Reuters) - Brent oil ended down for the first time in five sessions on Monday as worries that expected stimulus from the United States and Europe may fail to lift their economies overshadowed signs of lower OPEC production.
"Speculation over central bank action looks like it has gone too far," said Carsten Fritsch, an oil analyst at Commerzbank in Frankfurt.

Philippines to bid out disputed S.China Sea oil, gas blocks
MANILA, July 31 (Reuters) - The Philippines will offer three areas in the South China Sea for oil and gas exploration on Tuesday, two of them in waters also claimed by China.
Nido Petroleum Ltd  of Australia, Spanish energy company Repsol , French gas and power firm GDF Suez  and Italy's Eni  are among 15 firms that have pre-qualified for the bids, although it is not clear if they will participate.

OPEC oil output falls in July on Iran
LONDON, July 30 (Reuters) - OPEC oil output fell further from its highest in four years in July as U.S. and European sanctions cut supply from Iran to the lowest in more than two decades, a Reuters survey showed on Monday.
Supply from the 12-member Organization of the Petroleum Exporting Countries has averaged 31.18 million barrels per day (bpd) in July, down from 31.63 million bpd in June, the survey of sources at oil companies, OPEC officials and analysts found.

POLL-U.S. crude stocks seen down on lower imports
July 30 (Reuters) - U.S. crude oil stockpiles likely fell last week after a pullback in imports, a preliminary Reuters poll showed on Monday.
Crude inventories are forecast to have fallen by 1.6 million barrels in the  week to July 27, according to the survey of five analysts. Four analysts expected a drawdown, while one saw no change.ΕΎ

POLL-Heat, utility switching not enough to boost 2012 US gas prices
NEW YORK, July 30 (Reuters) - A scorching hot U.S. summer and a burst in demand from power utilities switching from coal to cheap gas has not proved enough to bolster significantly analysts' forecasts for natural gas prices.
As prices slid to 10-year lows below $2 per mmBtu in April, many electric utilities opted to switch off coal-fired plants and turn to gas to generate power, boosting consumption by about 7 billion cubic feet per day, or 10 percent.

NATURAL GAS-US natgas futures end up near 7 pct, front at 7-1/2-mth high
NEW YORK, July 30 (Reuters) - U.S. natural gas futures ended up sharply on Monday, with the front contract driven to a 7-1/2 month high by still-warm weather forecasts for the Northeast and Midwest that should force homeowners and businesses to crank up air conditioners.
"We've seen strong demand this summer, and (weather) forecasts continue to come in hotter than expected," said George Ellis, director at BMO Capital Markets in New York.

EURO COAL-Creeps higher despite oil fall
LONDON, July 30 (Reuters) -   Physical prompt European coal prices firmed slightly on Monday despite oil's fall to $106 a barrel, more enquiries were seen for Q4 cargoes delivered into Europe but few trades were reported.
"Perhaps people are taking the possible impact of the Colombia rail strike more seriously," one European trader said.

20120731 1036 Malaysia Corporate Related News.

BRDB chairman, partners in RM1.5bn takeover move
Bandar Raya Developments (BRDB) chairman and main shareholder Datuk Mohamed Moiz JM Ali Moiz and partners are in the midst of a takeover of the property developer with an indicative offer of RM2.90 a share and RM1.80 a warrant via their holding company Ambang Sehati SB (ASSB). ASSB currently holds about 18.5% or 92m shares and 18.4% or 41.4m warrants in BRDB as of 24 April 2012. (Malaysian Reserve)

AQRS gets RM141m road upgrading job from PWD
Gabungan AQRS, which is set to be listed on the local bourse today, said it has received a letter of acceptance from the Public Works Department (PWD) for a RM141m turnkey contract for road upgrading works in Negeri Sembilan. The contract, awarded to AQRS’ wholly owned subsidiary, Gabungan Strategik SB, is expected to be completed by end-2014. (Malaysian Reserve)

Selangor plans RM1bn to address water woes
The Selangor government plans to spend an estimated RM1bn to increase the capacity of the water treatment plants under its ambit by about 50%, a move that will see sufficient supply of water until 2020. Selangor Menteri Besar Tan Sri Khalid Ibrahim said the state government is seeking preliminary proposals to increase the capacity of the water treatment plants by using the containerised treatment technology which he described as cheaper and faster to implement. (Financial Daily)

PM launches RM26bn financial district
PM Datuk Seri Najib Razak yesterday launched the city’s new financial district, called the Tun Razak Exchange (TRX), which has an indicative gross development value of RM26bn. In appreciation of the contribution by Malaysia’s second PM Tun Abdul Razak who was his father, Najib said TRX, renamed from the Kuala Lumpur International Financial District (KLIFD), is expected to attract over 250 global companies and is slated to become a global centre for international finance, trade and services. (Financial Daily)

KJCF sells 60% stake in KJCPV
Kian Joo Can Factory (KJCF) has signed a deal to dispose of its 60% shareholding in Kian Joo Canpack (Vietnam) Co Ltd (KJCPV) to its JV partner Nihon Canpack Co Ltd of Japan (NCP Japan) for USD9.3m (RM29.3m). The disposal is expected to be completed by the end of next month. NCP Japan holds a 40% stake in KJCPV, which is involved in the contract packing of coffee, tea and fruit juices in Vietnam Binh Duong Province. (StarBiz)

Refiners upset over move to boost tax-free CPO exports
The government will increase the duty-free quota for crude palm oil (CPO) exports by another 2m tonnes, a move widely frowned upon by palm oil downstream players, who have been hoping for the government to scrap the quota as they said it lowered the industry's competitiveness and reduced national revenue. The plight of local downstream palm oil industry players was felt more following Indonesia's review of its export tax structure last year to boost its own refining industry. Palm Oil Refiners Association of Malaysia (Poram) chief executive officer Mohammad Jaaffar Ahmad has appealed to the government to re-consider its decision. (BT)

Maybank: Confident of keeping BII stake. Maybank is optimistic that it will be able to keep its controlling stake in Bank Internasional Indonesia (BII) despite the recent change in bank ownership rules in Indonesia. Maybank, which bought BII in 2008, currently owns 97.3% of Indonesia's eighth largest lender. BII yesterday reported a solid 61% jump in net profit for the first half of this year. Two weeks ago, Indonesia's central bank issued new rules limiting ownership in domestic banks at 40%. However, it said it would allow waivers if the owners were listed banks that maintained high levels of corporate governance and were in sound financial health. (Source: Business Times)

YTL: Opens resort off Sabah. YTL Hotels has started operating the first of its two planned luxury resorts on islands off Borneo. The diversified group started operating the Gaya Island Resort on July 1, YTL's first luxury property which it also owns in Sabah and Sarawak. The resort, built at an estimated cost of MYR75m, offers a total of 120 villas and a two-bedroom suite. Gaya Island Resort general manager Jeffrey Mong said the resort is targeting guests from the UK, Europe, Australia, Japan, Hong Kong, Singapore and Malaysia. The resort is expecting to garner an average room rate of above USD350 (MYR1,102) and an average occupancy of over 50% in its first year of operation. (Source: Business Times)

Property: PM launches MYR26b financial district. PM Datuk Seri Najib Razak yesterday launched the city's new financial district, called the Tun Razak Exchange (TRX), which has the indicative GDV of MYR26b. TRX, renamed from the Kuala Lumpur International Financial District (KLIFD), is expected to attract over 250 global companies and is slated to become a global centre for international finance, trade and services. With 1Malaysia Development Bhd as the master developer, the TRX will be build on a 60-acre land off Jalan Tun Razak and will take 15 years to complete. (Source: The Edge Financial Daily)

Regulations: GST unlikely to be in 2013 Budget. The 2013 Budget is not likely to introduce the goods and services tax (GST), said Deputy Finance Minister Datuk Donald Lim Siang Chai. Prime Minister and Finance Minister Datuk Seri Najib Razak is scheduled to table the 2013 Budget in Parliament on September 28. The GST Bill was tabled initially for reading in Parliament in December 2009 but its second reading was postponed. Critics of the GST proposal say the government should first address revenue leakages and wastage before introducing new taxes to boost its income. Lim then went on to say tax incentive proposals submitted by trade bodies, lobby groups and the public are being scrutinised by his ministry. (Source: Business Times)

IHH Healthcare: Gets green light to delist Turkey unit
IHH Healthcare’s plan to delist its unit Acibadem Saglik Hizmetleri ve Ticaret AS (ASH) on the Istanbul Stock Exchange, has been approved by the Capital Market Boards of Turkey. IHH, which bought a 60% stake in Acibadem, has a voluntary tender offer for the balance publicly traded shares of the latter on the stock exchange. It has been decided that the offer price would be applied during the voluntary tender offer transaction to shareholders of Acibadem Saglik Yatirimlari Holdings A.S. Almond Holdings A.S. per B class Acibadem share, with a nominal value of 24.90 Turkish Lira. Transactions on the voluntary tender offer will be realised between Aug 3 and Aug 16. (Bernama)

Bandar Raya Developments: To get takeover offer from major shareholder
Bandar Raya Developments (BRDB) is close to getting a takeover offer from its major shareholder, Ambang Sehati Sdn Bhd, at an indicative price of RM2.90 per share and RM1.80 per warrant. BRDB said Ambang Sehati was in the midst of finalizing the financing, including the procuring the necessary approvals for the funding for a potential takeover.  (Financial Daily)

SP Setia: Says 90% of its Sky Peak Residences apartments already taken
SP Setia has already sold 90% of its latest serviced apartments  in Johor, the Sky Peak Residences. General Manager of Setia City Development Sdn Bhd, Ricky Yeo, said the 32-storey apartment project, built along a resort hotel concept, had received encouraging response from buyers. Setia City Development is a subsidiary company of SP Setia. Yeo said about 10 to 15% of the apartment buyers were Singaporeans while the remaining were from Johor Bahru. The GDV of the high-end apartments is RM250m, involving the development of 482 units sized from 900 sq ft to 1,500 sq ft. The units are priced from RM400,000 to RM600,000, depending on their sizes. (Bernama)

Sarawak Plantation: To gain RM5.7m from land disposal
Sarawak Plantation is set to gain estimated RM5.7m, or 2 sen per share, from the disposal of 65 parcels of land measuring 23,340 sq m (251,230 sq ft) in Kemena district in Bintulu, Sarawak for RM7.2m cash. In announcement to Bursa Malaysia on Monday, Sarawak Plantation said its wholly-owned subsidiary Sarawak Plantation Property Holdings Sdn Bhd had entered into a sale and purchase agreement  with Everlasting Prosperity Sdn Bhd. (Financial Daily)

Property: Bidding process for RRI land to start by year-end
The prequalification process for bids for the Rubber Research Institutes of Malaysia (RRI) land in Sungai Buloh, Selangor, will start by the end of this year, says a source close to the Employees Provident Fund (EPF). The source said EPF would call for the prequalification bids as soon as it gets the government's nod for the proposed development of the land. He said the pre-qualification bids would be opened to developers who meet the requirements. EPF is the land owner and master developer of the project. It is buying 890ha of the available 1,215ha RRI agricultural land from the Federal Government for over RM2bn. (Business Times)

Property: PM launches RM26bn financial district
Prime Minister Datuk Seri Najib Razak on Monday launched the city’s new financial district, called Tun Razak Exchange (TRX), which has an indicative GDV of RM26bn. He said TRX is expected to attract over 250 global companies and is slated to become the global centre for international finance, trade and services. With 1Malaysia Development Bhd (1MDB) as the master developer, the TRX will be built on a 60-acre (24ha) land off Jalan Tun Razak and will take 15 years to complete. (Financial Daily)

Utilities: Selangor plans RM1bn to address water woes
The Selangor government plans to spend an estimated RM1bn to increase the capacity of the water treatment plants under its ambit by about 50%, a move that will see sufficient supply of water until 2020. Selangor Menteri Besar Tan Sri Khalid Ibrahim said the state government is seeking preliminary proposals to increase the capacity of water treatment plants by using the containerized treatment technology which he described as cheaper and faster to implement.  He is expected to make an announcement on the matter next month. In addition, Khalid said the state has views from consultants and even experts from UN on the viability of the technology and suitability for the region. (Financial Daily)

20120731 1036 Global Economy Related News.

New Zealand: NZ home-building approvals rebound as quake-hit areas surge
New Zealand home-building approvals rebounded in June after two months of decline, as consents in earthquake-hit Canterbury region more than doubled from a year earlier. Approvals last month increased by 5.7% from May to 1,341. The median estimate in a Bloomberg News survey of six economists was for a 7.3 % rise. Excluding apartments, approvals gained by 2.1 %. This adds to signs of a domestic recovery after New Zealand’s deadliest quake in eight decades hit Christchurch on Feb 2011. Central bank Governor Alan Bollard last week noted the housing recovery while keeping the official cash rate at a 2.5% record low. (Bloomberg)

EU: Heading for monthly loss before jobs, manufacturing data
The EUR is set for a monthly loss against the USD on signs that the sovereign-debt crisis is hampering growth in the region’s economy. The 17-nation currency held losses against the yen yesterday before reports this week forecast showed that manufacturing shrank but the euro areas’ jobless rate rose to a record high – 11.2% June and the highest on record according to a median survey of economists. The final reading on a gauge of euro-region manufacturing probably held at 44.1 in July, the lowest since June 2009, economists in a separate Bloomberg poll estimated. The European Central Bank meets on 2 Aug. (Bloomberg)

China: Increases railway spending plan for second time in month
China announced a jump in planned railway spending as the State Council called for private investment in utilities and healthcare. The Ministry of Railways, the nation’s largest corporate debt issuer, plans to spend CNY470bn (USD74bn) on railroads and bridges this year. This is the second increase in July, making a 14% climb in combined gain from the previous figure. The new target exceeds last year’s CNY461bn in spending, and follows Premier Wen Jiabao’s comments that promoting investment growth is the key now to stabilizing an expansion that decelerated to 7.6% last quarter, a three-year low. (Bloomberg)

UK: Mortgage approvals decline to lowest level in 18 months
UK mortgage approvals fell more than economists’ forecast in June to an 18-month low as concerns about the euro area mounted and Britain’s recession deepened. Lenders granted 44,192 loans to buy homes, compared with a revised 50,544 the previous month, the Bank of England said today. Economists predicted approvals would drop to 48,000. Recent housing-market data suggested weakening demand is hurting prices. The economy shrank 0.7% in the second quarter, and the Bank of England and the Treasury have introduced a program to lower borrowing costs and boost lending. (Bloomberg)

US: Fed may cut banks’ interest on reserves after ECB
Federal Reserve Chairman Ben Bernanke may take another look at cutting the interest rate to lower short-term borrowing costs and spur slowing US expansion. Bernanke testified to Congress on 17 July that reducing the rate from its current 0.25% is a step to take to reduce unemployment, stuck above 8% for over three years. Policymakers meeting this week are looking for new monetary tools after the Fed lowered its benchmark interest rate to near zero in December 2008 and purchased USD2.3trn of securities to spur the economy. A 27 July government report showed economic growth slowed to a 1.5% annual rate in the second quarter as consumers curbed spending. (Bloomberg)

20120731 1025 Soy Oil & Palm Oil Related News.

ITS CPO export down 14.8% to 1,234,603 tonnes for the period of 1~31 Jul 2012.
SGS CPO export down 18.5% to 1,193,227 tonnes for the period of 1~31 Jul 2012.

Pro Farmer: After the Bell Soybean Recap (source:CME)
Soybean futures finished mostly 35 to 45 1/2 cents higher today, which was just slightly off session highs. Weekend rains were disappointing as coverage was spotty and amounts were lighter than hoped for across the Corn Belt. Additionally, the forecast offers very little hope of meaningful relief during the first half of August. As a result, traders actively built premium into the market amid concerns crop prospects will continue to fade.

Soybean Complex Market Recap(source:CME)
August Soybeans finished up 41 1/2 at 1725 3/4, 1 1/2 off the high and 27 up from the low. November Soybeans closed up 41 3/4 at 1643 1/2. This was 26 up from the low and 4 1/2 off the high. August Soymeal closed up 18.6 at 546.3. This was 14.3 up from the low and 0.7 off the high. August Soybean Oil finished up 0.53 at 52.57, 0.34 off the high and 0.35 up from the low. November soybeans traded sharply higher into the close as traders fear the warmer and drier weather outlook this week will reduce soybean yield potential further. Updated crop condition ratings will be released this afternoon and the trade expects a 2% decline in soybean good/excellent ratings. Crop scouts remain optimistic on the soybean production in the eastern Corn Belt after good rainfall last week. However, rainfall this week is expected to be limited and 95-100 degree temperatures are expected to move back into the central Midwest this week. Restricted showers will be seen in the northern Delta which could stress soybean crops further. This is offering support to the soybean market today. Soybean meal traded $18 higher and soybean oil was up 60 near the closing bell. Export inspections for the week ending July 26th totaled 15.49 million bushels vs. 15.75 for the week prior. Weekly export inspections continue to outperform the pace needed to reach the USDA estimate for this marketing year. Inspections needed each week total 10.92 million bushels. Weekly inspections are now 95.7% of the USDA estimate vs. the 5 year average of 94.7%. Outside markets offered minimal resistance to soybean prices today as the US Dollar mostly traded higher and US Stocks were generally weaker throughout the day.

VEGOILS-Palm oil rises to 1-week high on stimulus hopes
SINGAPORE, July 30 (Reuters) - Malaysian crude palm oil edged to a one-week high tracking gains in broader financial markets on expectations the Federal Reserve and European Central Bank (ECB) will announce new measures to encourage growth, boosting commodity demand.
"Euro zone worries have eased a little and rain that was anticipated in U.S. did not match expectations," said a Singapore-based trader with a foreign commodities house. "But we will have to wait and see tonight's USDA crop progress report for price direction."

20120731 1025 Global Market Related News.

Asia FX By Cornelius Luca - Mon 30 Jul 2012 17:04:40 CT (Source:CME/www.lucafxta.com)
The appetite for risk was limited on Monday after surging in the second half of last week on hopes that both ECB and the Fed will ease as early as this week in order to alleviate the Eurozone debt crisis and support the deteriorating US economy. Now, these central banks are faced to the task of having to meet these expectations. The European currencies edged lower on profit taking after surging since Wednesday, while the commodity currencies and the yen advanced. The US stock indexes edged lower. The gold/oil ratio edged up. The short-term outlook for the European and commodity currencies is sideways. The medium-term outlook for most of the foreign currencies is sideways. The LGR short-term model is short only the euro and franc.  Good luck!

Today's economic calendar
UK: Gfk consumer confidence for July
Australia: Building permits for June
Japan: Overall household spending for June
Japan: Unemployment rate for June
Japan:  Housing starts for June

Asian Stocks Swing From Gains to Losses Ahead of Fed, ECB(Source:Bloomberg)
Asian stocks swung between gains and losses as investors await policy announcements by the Federal Reserve and the European Central Bank amid signs of a global economic slowdown. Information technology and utility shares advanced. Hokuriku Electric Power Co. soared 14 percent, leading utilities higher in Tokyo after raising its sales forecast. Canon Inc. (7751), the world’s biggest camera maker, advanced 4 percent on a share buyback plan. Drugmaker Otsuka Holdings Co. fell 1.5 percent, pacing declines among Japanese health-care companies. The MSCI Asia Pacific Index rose 0.1 percent to 117.40 as of 10:17 a.m. in Tokyo before markets in Hong Kong and China opened. About three shares fell for each two that rose. The measure has added 0.2 percent this month, headed for a second monthly gain. It yesterday capped the biggest three-day rally since Dec. 5.
“At the moment, the markets are really focused on central bank actions rather than the economic environment,” said Matthew Sherwood, Perpetual Investments’ head of investment markets research in Sydney. Perpetual manages about $25 billion. “We may get a little bit of sell-down in Asian equities after pretty good rises.” The MSCI Asia Pacific Index fell 9 percent from this year’s high on Feb. 29 through yesterday amid concern Europe’s sovereign-debt crisis will worsen and China’s economy is slowing. The regional benchmark index traded at 11.9 times estimated earnings, compared with 13.5 for the Standard & Poor’s 500 Index (SPXL1) and 11.2 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

Japan Stocks Fall First Time in Four Days on Factory Data(Source:Bloomberg)
Japanese stocks fell for the first time in four days, with the Nikkei 225 Stock Average heading for the worst monthly performance among developed equity markets, as manufacturing contracted this month. Shipping companies slipped before reporting earnings today. Fanuc Corp., the world’s largest maker of controls that run machine tools, slid 4.6 percent, the biggest decline on the Nikkei 225. (NKY) Nippon Yusen K.K. (9101), Japan’s largest shipping line, fell 1.7 percent. Canon Inc. (7751) soared 3.9 percent after saying it will spend 50 billion yen ($640 million) to buy back shares. The Nikkei 225 lost 0.4 percent to 8,605.51 as of 10:05 a.m in Tokyo, heading for a 4.5 percent loss this month. That’s the worst performance among 24 benchmark developed-market equity indexes tracked by Bloomberg News. The broader Topix Index (TPX) today retreated less than 0.1 percent to 731.48.
Shares fell even as Japan’s jobless rate unexpectedly declined in June to 4.3 percent, beating analyst expectations that unemployment would remain flat at 4.4 percent. The Topix lost 16 percent since March 27, leaving the gauge trading at 0.9 times book value, compared with 1.1 for the MSCI World Index, data compiled by Bloomberg show. A number less than one means a company can be bought for less than the value of its assets.

U.S. Stock-Index Futures Decline on Economic Concern(Source:Bloomberg)
U.S. stock futures fell, signaling the Standard & Poor’s 500 Index may drop for the first time in three days, before reports this week that may show the country’s jobless rate remained above 8 percent and consumer confidence fell in July. JPMorgan Chase & Co. (JPM) lost 0.8 percent in early New York trading after Deutsche Bank AG lowered its rating on the shares. Nexen Inc. (NXY) dropped in Germany on concern Cnooc Ltd.’s acquisition of the company may spark government concern about Chinese control of U.S. energy sources. Microsoft Corp. (MSFT) rose 1.1 percent in premarket trading. S&P 500 futures expiring in September lost 0.3 percent to 1,379.1 as of 7:15 a.m. in New York. The benchmark gauge completed its third weekly gain, the longest stretch since March. Dow Jones Industrial Average futures slipped 20 points, or 0.2 percent, to 13,013 today.
“We’re getting a big picture that’s consistent with the commentary seen out of the U.S. over the last six months, that recovery continues to pace, but there’s no boom in sight,” Michael McCarthy, chief market strategist at CMC Markets in Sydney said in an interview on Bloomberg Television. “What we’re expecting in the U.S. is ongoing modest growth.” The Dow topped 13,000 last week, capping its longest stretch of weekly advances since January, amid expectations the European Central Bank will buy bonds to help lower borrowing costs and preserve the euro. Meanwhile, the Chicago Board Options Exchange Volatility Index has fallen to the lowest daily average in five years.

Most U.S. Stocks Slip After Two-Day Rally; Corn at Record(Source:Bloomberg)
Most U.S. stocks fell following the biggest two-day rally of the year, while European equities rose for a third day and Spanish bonds rallied on speculation policy makers will take action to ease the region’s debt crisis. Corn jumped to a record as an American drought persisted. The Standard & Poor’s 500 Index (SPXL1) slipped 0.05 percent to 1,385.3 at 4 p.m. in New York after jumping 3.6 percent over the previous two sessions. Three stocks retreated for every two that rose on U.S. exchanges. The Stoxx Europe 600 Index surged 1.6 percent to extend a rally since July 25 to more than 5 percent. Ten-year Treasury notes halted a three-day retreat, sending rates down five basis points to 1.50 percent. The euro depreciated 0.5 percent to $1.2258, snapping a three-day gain. Corn, wheat and soybeans rallied at least 1.8 percent.
European Central Bank President Mario Draghi met with U.S. Treasury Secretary Timothy Geithner in Frankfurt today after leaders in Berlin, Paris and Rome backed him by saying they will do what’s needed to protect the 17-nation euro. Spain’s economy shrank 0.4 percent in the second quarter, the National Statistics Institute in Madrid said today. The Federal Reserve will start a two-day meeting tomorrow. “People looked at their portfolios over the weekend and, after a move like we saw, that usually brings more sellers and people rearranging their positions,” Rick Fier, director of equity trading at Conifer Securities LLC in New York, said in a telephone interview. His firm oversees $12 billion in assets. “It’s an extremely frustrating market. People that were shorting lost it all in two days, people that were more long came back but nobody is killing it.”

European Stocks Rise on Euro Support Pledge(Source:Bloomberg)
European stocks rose to their highest level since April amid optimism the European Central Bank will win support from policy makers for a plan to ease the euro area’s debt crisis. Air France-KLM Group (AF) surged 19 percent after it posted a narrower second-quarter loss. Evraz (EVR) Plc and Fiat SpA (F) climbed more than 4.5 percent, leading rallies by gauges of commodity producers and automakers. JCDecaux SA (DEC) plunged 6.9 percent as it reported a 13 percent drop in first-half profit. The benchmark Stoxx Europe 600 Index gained 1.6 percent to 263.94 at the close in London, completing a three-day rally of 5.4 percent, the largest since November. The gauge has risen 13 percent from this year’s low on June 4 as Greece elected a coalition government prepared to abide by the terms of its two European Union-led bailouts.
“We’ve been here before,” George Godber, who helps oversee $22 billion as a fund manager at Charles Stanley’s Matterley division in London, said in an interview on Bloomberg Television. “We’ve actually got to see if they’re going to act now and that’s really what matters. It doesn’t have to be massive steps forward, it just has to be an outlining of a road map.”

Emerging Stocks Rise to 3-Week High on Europe Speculation(Source:Bloomberg)
Emerging-market stocks rose, driving the benchmark index to a three-week high, on optimism European Union policy makers will act to ease the region’s debt crisis. The MSCI Emerging Markets Index (MXEF) climbed 0.8 percent to 948.97 by 5:10 p.m. in New York. Brazil’s Bovespa stock index rose 1.2 percent as steelmaker Usinas Siderurgicas de Minas Gerais SA surged after Goldman Sachs Group Inc. raised its rating. Samsung Electronics Co. (005930), the world’s largest maker of televisions and mobile phones, rose to an 11-week high in Seoul after Daewoo Securities Co. said the company’s profit will accelerate from the second quarter.
U.S. Treasury Secretary Timothy F. Geithner and German Finance Minister Wolfgang Schaeuble held talks in Germany today and backed a commitment by European leaders to do everything needed to defend the euro area while failing to mention its weakest link, Greece. Geithner was scheduled to meet European Central Bank President Mario Draghi later today. In the U.S., Federal Reserve policy makers convene this week before a jobs report to decide whether additional stimulus is needed.

Treasuries Remain Higher Amid Speculation Fed to Ease(Source:Bloomberg)
Treasuries remained higher following a gain yesterday as the Federal Reserve starts a two-day policy meeting today amid speculation it will add to monetary stimulus to boost the economy. Ten-year yields were about 12 basis points from a record low before reports that economists say will show consumer spending stagnated in June and confidence deteriorated for the longest period since 2008. Federal Reserve Chairman Ben S. Bernanke said on July 17 that policy makers are “looking for ways to address the weakness in the economy should more action be needed.” “We can’t expect a significant improvement in the U.S. economy, and that’s weighing on Treasury yields,” said Makoto Suzuki, a senior bond strategist in Tokyo at Okasan Securities Co. “The Fed may extend its pledge to keep interest rates low for longer.”
The benchmark 10-year yield was little changed at 1.5 percent as of 9:07 a.m. Tokyo time, according to Bloomberg Bond Trader prices. It reached the all-time low of 1.379 percent on July 25. The 1.75 percent security due May 2022 traded at 102 1/4. The Fed said in January that the benchmark interest rate will stay at “exceptionally low levels” at least through late 2014, extending its pledge from the middle of 2013. Consumer spending probably rose 0.1 percent in June following no change the prior month, according to the median estimate of economists in a Bloomberg News survey taken before the Commerce Department releases figures today.

FOREX-Euro slips on profit-taking as ECB action awaited
LONDON, July 30 (Reuters) - The euro slipped, with traders taking profit on the gains enjoyed late last week due to growing expectations the European Central Bank will launch fresh action to tackle the euro zone's debt crisis.
"Draghi has to put some action behind his words last week ... The bias is towards disappointment and that's what's creeping into markets now," said Niels Christensen, currency strategist at Nordea in Copenhagen.

Aussie Dollar Halts Gain Before Building Permits Data(Source:Bloomberg)
Australia’s dollar halted an advance that took it to a four-month high before data that may show building approvals in the nation declined last month. The so-called Aussie slid versus most of its major counterparts as economists forecast unemployment in the euro area climbed to a record in June, tempering demand for higher- yielding assets. The Australian and New Zealand currencies are set to close out a second monthly gain against the greenback as the Federal Reserve begins its two-day policy meeting today. “Chances are that the Aussie loses a little bit of steam today,” said Joseph Capurso, a strategist in Sydney at Commonwealth Bank of Australia (CBA), the nation’s biggest lender. “The building approvals report should be very, very weak.”
The Australian dollar was little changed at $1.0502 as of 9:19 a.m. in Sydney after touching $1.0508 yesterday, the strongest since March 27. The Aussie traded at 82.09 yen from 82.10. New Zealand’s currency bought 80.90 U.S. cents from 80.89 yesterday, when it rose to 81.13 cents, the highest since May 2. The so-called kiwi was unchanged 63.24 yen. Australia’s 10-year government bond yield dropped six basis points, or 0.06 percentage point, to 3.07 percent. New Zealand’s two-year swap rate, a fixed payment made to receive floating rates, was little changed at 2.77 percent.

Dollar Repatriation First Since Lehman Evokes Post-LTCM Gain(Source:Bloomberg)
Until about four months ago, JKMilne Asset Management invested at least half the money in its global fund outside the U.S. No more. With Europe’s debt crisis intensifying, the Fort Myers, Florida-based firm with $1.8 billion under management has all its money in dollars. “It’s been a winning strategy,” John Milne, chief executive officer, said July 26 in a telephone interview. “Given the magnitude of the problem, there was the realization that there was a contagion possibility.” Milne has plenty of company. U.S. investors repatriated $48.9 billion from December to May, the first time they brought assets home during a six-month stretch since the period following the failure of Lehman Brothers Holdings Inc. in 2008, according to Treasury Department data compiled by Bloomberg. The flows are among the biggest since 1999, after the collapse of hedge fund Long-Term Capital Management LP boosted the dollar as funds retreated from all but the world’s safest assets.
IntercontinentalExchange Inc.’s Dollar Index has risen 3.3 percent this year as investors moved cash into funds that focus on U.S. bonds. Inflows more than doubled to $157 billion in the first six months from $65 billion during the same period a year earlier, while international bond investments were unchanged, according to TrimTabs Investment Research.

Euro Set for Monthly Loss Before Jobs, Manufacturing Data(Source:Bloomberg)
The euro was set for a monthly loss against the dollar on signs the sovereign-debt crisis is hampering growth in the region’s economy. The 17-nation currency maintained losses against the yen from yesterday before reports this week forecast to show the jobless rate in the euro area rose to a record and manufacturing shrank, and before the European Central Bank’s Governing Council meets on Aug. 2. The dollar remained lower against its Japanese counterpart amid speculation Federal Reserve policy makers may signal additional stimulus when they conclude a two-day meeting that starts today. “Apart from Germany, the rest of Europe is struggling, and the crisis is far from solved,” said Thomas Averill, managing director in Sydney at Rochford Capital, a currency and interest- rate risk-management company. “The euro is going down to $1.18.”
The euro traded at $1.2261 as of 10 a.m. in Tokyo from $1.2260 yesterday, when it fell 0.5 percent. It was poised for a 3.2 percent decline this month. The shared currency was little changed at 95.84 yen from 95.85, set for a 5.1 percent slide in July. The U.S. dollar bought 78.17 yen from 78.18 yesterday, when it declined 0.4 percent. The greenback has dropped 2 percent since the end of June versus its Japanese counterpart.

Geithner, Schaeuble Hail Euro Plan as Greece Gets No Word(Source:Bloomberg)
U.S. Treasury Secretary Timothy F. Geithner and German Finance Minister Wolfgang Schaeuble backed a commitment by European leaders to do everything needed to defend the euro area while failing to mention its weakest link, Greece. In a joint statement issued after they held talks on the German North Sea island of Sylt today, Geithner and Schaeuble “took note” of comments made last week by European leaders to “take whatever steps are necessary to safeguard financial stability” in the 17-nation currency area. The two officials welcomed Ireland’s sale of bonds and Portugal’s “continued success in meeting program commitments” and discussed the “considerable efforts” made by Spain and Italy “to pursue far-reaching fiscal and structural reforms.” They didn’t refer to Greece, where international creditors are reviewing the government’s progress.
The talks signaled U.S. endorsement for European Central Bank President Mario Draghi as he seeks a game changer in the battle against Europe’s sovereign-debt crisis almost three years after it surfaced in Greece. Geithner is due to conclude his one-day trip to Germany later today by meeting with Draghi in Frankfurt. An ECB spokeswoman declined to comment when asked whether the ECB would release a statement after the Draghi meeting.

Fed Weighs Cutting Interest on Banks’ Reserves After ECB Move(Source:Bloomberg)
Federal Reserve Chairman Ben S. Bernanke may be taking another look at cutting the interest rate the Fed pays on bank reserves to bring down short-term borrowing costs and spur the slowing U.S. expansion. Bernanke testified to Congress on July 17 that reducing the rate from its current 0.25 percent is one of several easing steps the Fed might take to reduce unemployment stuck above 8 percent for more than three years. In February, by contrast, the Fed chairman told Congress that lowering the rate might drive away investors from short-term money markets. “They’re reconsidering it,” said Ward McCarthy, a former Richmond Fed economist. A July 5 decision by the European Central Bank to cut its deposit rate to zero is prompting renewed interest in the strategy, said McCarthy, chief financial economist at Jefferies & Co. McCarthy said it’s unlikely the Fed will reduce the rate at a two-day meeting that starts tomorrow.
Policy makers meeting this week are looking for new monetary tools after the Fed lowered its benchmark interest rate to near zero in December 2008 and purchased $2.3 trillion of securities to spur the economy. A government report on July 27 showed economic growth slowed to a 1.5 percent annual rate in the second quarter as consumers curbed spending.

Deflation Dismissed by Bond Measure Amid QE3 Anticipation(Source:Bloomberg)
For all the handwringing over the slowdown in the U.S. economy, the bond market shows there’s less risk of deflation now than before the Federal Reserve’s first two rounds of large-scale debt purchases. The expectation that consumer prices will rise, measured by the five-year, five-year forward breakeven rate, means that Fed Chairman Ben S. Bernanke has persuaded traders the U.S. will avoid the chronic deflation that has slowed Japan’s economy since 1995. It also complicates the central bank’s decision about starting more quantitative easing to boost an economy that grew at the slowest pace in a year during the second quarter. Commodity prices surged during QE1 and QE2 in 2008 and 2010.
“Higher inflation results in a tax on consumers and slows the economy down,” Michael Materasso, a senior portfolio manager and co-chairman of the fixed-income policy committee at Franklin Templeton Investments, which oversees $320 billion of bonds, said in a July 24 interview at Bloomberg headquarters in New York. “If you end up with a spike in commodity prices, have you done more harm than good?” The Fed’s favored bond-market gauge of inflation expectations ended last week at 2.39 percent, above the 2 percent levels in 2008 and 2010 that led the central bank to inject $2.3 trillion into the economy by purchasing Treasuries and mortgage-related bonds, the policy known as quantitative easing. The five-year, five-year measure shows how much traders anticipate consumer prices will rise during a period of five years starting in 2017.

China Increases Railway Spending Plan for Second Time(Source:Bloomberg)
China announced a jump in planned railway spending and the State Council called for private investment in utilities and health care as Premier Wen Jiabao tries to reverse an economic slowdown. The Ministry of Railways, the nation’s largest corporate debt issuer, plans to spend 470 billion yuan ($74 billion) on railroads and bridges this year, according to a bond prospectus issued yesterday. That’s the second increase in July, making a combined gain of about 14 percent from the previous figure. The new target exceeds last year’s 461 billion yuan in spending and follows Wen’s July 10 comments that promoting investment growth is the key now to stabilizing an expansion that decelerated to 7.6 percent last quarter, a three-year low. At the same time, Chinese officials are signaling the slowdown isn’t deep enough to warrant a return to the 700 billion-yuan level of railway-construction funds in 2010.
“China is selectively upscaling the stimulus,” said Lu Zhengwei, chief economist with Industrial Bank Co. in Shanghai. “Premier Wen Jiabao said China will do something to boost confidence, and this is fresh evidence.” Economic growth hit bottom in the second quarter and will probably rebound to 7.8 percent in the third quarter, Lu said.

Singapore’s GIC Adds Cash, Cuts Stocks and Bonds Amid Crisis(Source:Bloomberg)
Government of Singapore Investment Corp., managing more than $100 billion, said it almost quadrupled its cash allocation, pared bonds and stocks and reduced its holdings in Europe amid the region’s debt crisis. Cash made up 11 percent of its portfolio in the year ended March from 3 percent a year earlier, GIC, as the sovereign wealth fund is known, said in its annual report. Stocks fell to 45 percent from 49 percent as it pared equities in developed markets, while bonds dropped to 17 percent from 22 percent. GIC is reducing its investments as the MSCI World Index (MXWO) posted its biggest slump since the 2008 global financial crisis and market volatility reached the highest level in more than two years. Investment options become limited for government funds seeking to preserve capital as policy makers across the world prepare for a deeper impact from Europe’s debt woes.
“There are not many safe havens, so cash is king,” said Ronald Wan, a Hong Kong-based managing director at China Merchants Securities Co., which oversees about $1.5 billion. “It’s logical for everyone to cut investments and take a wait- and-see approach. The economic downturn will last for a while before we can see certainty and a swing-back in investment sentiment.”

Korea Output Unexpectedly Falls as Europe Caps Demand(Source:Bloomberg)
South Korea’s industrial production fell for the first time in three months in June as Europe’s debt crisis and China’s slowing economy curtailed export demand. Output fell 0.4 percent last month from May when it climbed a revised 1.3 percent, Statistics Korea said today. The median estimate of 12 economists in a Bloomberg News survey was for a 0.1 percent gain. Production rose 1.6 percent from a year earlier. South Korean manufacturers’ confidence dropped to a three- year low for August, the central bank said yesterday, after Asia’s fourth-largest economy grew at the slowest pace in almost three years last quarter. Bank of Korea Governor Kim Choong Soo warned last week the economy is losing steam, fueling speculation policy makers will follow a surprise rate cut on July 12 with further easing.
“The lower-than-expected output figure once again shows that the European crisis is hurting South Korean companies and consumer sentiment more than what economists had thought,” said Lee Sung Kwon, an economist at Shinhan Investment Corp. “Although the industrial output data may not be enough for the Bank of Korea to cut rates again this month, they may have to in September or October.” The won gained 0.1 percent to 1,137.60 per dollar at the close in Seoul yesterday, according to data compiled by Bloomberg. It touched 1,132.45 earlier, the strongest since May 4, on speculation Europe’s policy makers will act to resolve the region’s debt crisis. The benchmark Kospi Index rose 0.8 percent.

South Korea Manufacturer Confidence Drops to 3-Year Low(Source:Bloomberg)
South Korean manufacturers’ confidence dropped to the lowest level in more than three years as Europe’s worsening fiscal crisis damped sentiment in a country where exports make up about half the economy. An index measuring expectations for August was at 70, the lowest level since May 2009, after dropping from a revised 81 in July, the Bank of Korea said in a statement in Seoul today. A measure of expectations at non-manufacturing companies also dropped to 69 from a revised 76. “The South Korean economy is muddling through uncertainty caused by the European debt crisis,” Oh Suk Tae, an economist at SC First Bank Korea Ltd. in Seoul, said before the release. “The central bank indicated that it’s ready to act, but the market is expecting supplementary fiscal support only if the economy contracts significantly.”
Asia’s fourth-largest economy grew at the slowest pace in almost three years last quarter, with HSBC Holdings Plc and Citigroup Inc. saying the Bank of Korea may cut rates again this year. The BOK lowered its main rate a quarter percentage point to 3 percent on July 12, and Governor Kim Choong Soo warned last week the nation may miss a 3 percent growth estimate for 2012.

Japan Jobless Rate Falling May Fail to End Recovery Concerns(Source:Bloomberg)
Japan’s jobless rate unexpectedly declined in June, a positive sign for an economy struggling with gains in the yen and weakness in export demand because of Europe's debt crisis. The rate fell to 4.3 percent from 4.4 percent the previous month, the statistics bureau said today in Tokyo. The median estimate of 29 economists surveyed by Bloomberg News was for the rate to stay at 4.4 percent. The yen rose more than 6 percent against the dollar since mid-March, hurting profits of exporters such as Canon Inc. (7751) and Nintendo Co., and reached an 11-year high against the euro last week. The improvement in the unemployment rate may not be enough to dispel concerns that a recovery is losing steam after industrial output declined for a third month in June. “Activity could drop more sharply once the full impact of the crisis in Europe and the strong yen hit home,” Julian Jessop, an economist at Capital Economics Ltd. in London said before today’s release.

BOJ Shouldn’t Buy Foreign Bonds, Ex-MOF’s Utsumi Says(Source:Bloomberg)
The Bank of Japan (8301) should reject calls for it to buy foreign currency bonds to weaken the yen because such a move would hurt its independence, said Makoto Utsumi, a former top currency official. Such purchases would be “akin to currency intervention and wouldn’t be in the bank’s realm of authority,” said Utsumi, 78, the former vice finance minister for international affairs and now president of Japan Credit Rating Agency Ltd. “We’re not in a situation where we need to blur that distinction.” Signs of a global slowdown have boosted the yen’s haven appeal, sending it to an 11-year high versus the euro this month. It was at 78.12 per dollar as of 9:26 a.m. in Tokyo, less than 4 percent from the postwar record of 75.35 on Oct. 31. Former BOJ Deputy Governor Kazumasa Iwata and Takehiro Sato, who was appointed to the central bank’s policy board last week, have called for the bank to weigh buying foreign-currency bonds.
Current Deputy Governor Hirohide Yamaguchi on July 25 signaled the BOJ isn’t considering such purchases, saying that doing so to weaken the yen would be against the central bank law, which says that the government dictates currency policy.

RBI Says India Inflation Risks Significant Even as Growth Slows(Source:Bloomberg)
Indian inflation is a major challenge for monetary policy even as economic expansion remains weak, the Reserve Bank of India said. Threats to the economy “have been amplified by decelerating global trade and domestic supply constraints,” the central bank said yesterday ahead of its rate decision in Mumbai today. At the same time, “persistent inflation limits the space for monetary policy to revive growth.” Governor Duvvuri Subbarao faces inflation above 7 percent even with expansion at a nine-year low, curbing his scope to join a stimulus drive extending from China to Europe. Nearly all analysts in a Bloomberg News survey predict he will leave borrowing costs unchanged as a drop in the rupee, a scanty monsoon and infrastructure gaps, underscored yesterday by India’s worst power-grid failure in a decade, stoke price pressures.
“The Reserve Bank has rightly pointed out significant risks to inflation,” said Brinda Jagirdar, an economist at State Bank of India (SBIN) in Mumbai. “That leaves it with little headroom to cut rates to support growth. New Delhi has to act on fiscal tightening and accelerating reforms.”

Singh’s $400 Billion Power Plan Gains Urgency as Grid Collapses(Source:Bloomberg)
India’s worst power-grid failure in a decade exposed the urgency behind Prime Minister Manmohan Singh’s bid to attract $400 billion in investment and ease an electricity deficit that is holding back economic growth. Seven states that are home to more than 360 million people were plunged into darkness early yesterday as power networks collapsed, possibly after too many provinces simultaneously purchased electricity beyond their scheduled allowance, Power Grid Corp. (PWGR) of India Chairman R.N. Nayak told reporters. It took about 15 hours for 80 percent of services to be resumed. The blackout “was a fairly large breakdown that exposed major technical faults in India’s grid system,” Subhranshu Patnaik, a Gurgaon-based senior director at Deloitte Touche Tohmatsu India Pvt., said yesterday. “If this were a simple demand-supply problem, the grid operator would have intervened to strike a balance. Something went terribly wrong which caused the backup safety systems to fail.”
Businesses and households across much of Delhi, Haryana, Punjab, Himachal Pradesh, Uttar Pradesh, Jammu and Kashmir, and Rajasthan states had to turn to generators, while services on New Delhi’s metro and Indian railways were suspended for several hours. Traffic signals failed, jamming roads for morning commuters.

Euro-Area Economic Confidence Drops More Than Forecast(Source:Bloomberg)
Economic confidence in the euro area fell more than economists forecast to the lowest in almost three years in July, suggesting the economy’s slump extended into the third quarter as governments struggled to tame the debt crisis. An index of executive and consumer sentiment in 17-nation euro area dropped to 87.9 from 89.9 in June, the European Commission in Brussels said today. That’s the lowest since September 2009. Economists had forecast a drop to 88.9, the median of 26 estimates in a Bloomberg News survey showed. European governments are striving to contain the debt turmoil, which has undermined confidence and last month forced Spain and Cyprus to seek external aid. European Central Bank President Mario Draghi, who will meet with U.S. Treasury Secretary Timothy Geithner in Frankfurt today, said last week that policy makers will do whatever is needed to preserve the euro.
“It appears that the euro zone is headed for further clear gross-domestic-product contraction in the third quarter,” said Howard Archer, chief European economist at IHS Global Insight, who estimates the second-quarter contraction at 0.3 percent. The weakness “piles yet more pressure on the ECB to come up with concrete measures at its policy meeting” on Aug. 2.

Draghi on Offensive as Game Changer Sought in Crisis(Source:Bloomberg)
European Central Bank President Mario Draghi has gone on the offensive as he seeks a game changer in the battle against the sovereign debt crisis. Draghi, who sparked a global market rally last week by pledging to do whatever it takes to preserve the euro, is trying to build consensus among governments and central bankers for a plan to ease borrowing costs in Spain and Italy before ECB policy makers convene on Aug. 2. He meets with U.S. Treasury Secretary Timothy Geithner in Frankfurt today and is also attempting to win over Bundesbank President Jens Weidmann, a critic of ECB bond purchases. Berlin, Paris and Rome have already endorsed Draghi’s approach, echoing his language in saying they will do what’s needed to protect the 17-nation euro. Draghi must now deliver or face a renewed selloff on bond markets, where soaring Spanish and Italian yields have fueled speculation that the monetary union could fall apart.
Draghi “put his personal credibility on the line” and “would not have done so without being confident about his key constituency,” Erik Nielsen, global chief economist at UniCredit Bank AG in London, wrote in a note to clients yesterday. “The ECB under Draghi does not like to mess around in the market, but if it sees a need, it will come with overwhelming force.”

20120731 1025 Global Commodities Related News.

Hedge Funds Add Wagers in Longest Streak Since 2009: Commodities(Source:Bloomberg)
Hedge funds raised commodity bets in the longest bullish streak in three years as speculation that policy makers will increase economic stimulus drove prices toward the biggest monthly rally since October. Money managers raised their net-long positions across 18 U.S. futures and options by 3.4 percent to 1.17 million contracts in the week ended July 24, U.S. Commodity Futures Trading Commission data show. Wagers gained for seven weeks, the longest increase since June 2009. Corn bets climbed to the highest since September 2011, and traders are the most bullish on natural gas since October 2006.
Investors added bets even as commodities fell 0.4 percent in the week to July 24. The bulls were proved right after prices rebounded 1.8 percent in the following three days as European Central Bank President Mario Draghi pledged to protect the euro on July 26. German Chancellor Angela Merkel and French President Francois Hollande echoed his comments the next day. A U.S. government report on July 27 showed the world’s biggest economy grew at a slower pace in the second quarter, increasing pressure on the Federal Reserve to boost aid measures. “Some of these issues that have been weighing against commodities, particularly industrial metals and energy, have probably over-emphasized the negative,” said Bill O’Neill, the chief investment officer for the Europe, Middle East and Africa at Merrill Lynch Wealth Management, which oversees more than $1.8 trillion. “The fundamental backup is the policy easing.”

Asia's feed mills caught short by costly corn
SINGAPORE, July 30 (Reuters) - As corn prices climb past the record levels hit this time last year, a major factor has changed for Asian importers of the grain: Australia no longer has heaps of cheap feed wheat as a substitute.
For a region that buys just under half the world's traded corn, the 25 percent jump in cash prices since the start of June for the main animal feed ingredient means more costly pork, chicken and beef by the end of the year.

Grocery giants bloodied by surge in corn prices
--Gavin Maguire is a Reuters market analyst. The views expressed are his own--
CHICAGO, July 27 (Reuters) - It's not just cattle feeders and ethanol manufacturers who are feeling the pain from the recent sharp rise in crop prices. Top manufacturers of goods that line grocery store shelves and meat counters have also been reeling of late as their share prices slump on the back of the dramatic surge in key production inputs.
Pork giant Smithfield Foods , chicken producer Tyson Foods  and breakfast food maker Kellogg Co  have all suffered steep share price declines lately on worries that each firm will have trouble passing on the steeply higher input and ingredient costs to consumers amid the prevailing uncertain economy.

Grains Rally on Weather(source:CME)
Another round of above average temperatures and lack of rain sparked a fresh round of buying interest and sharp gains in the grain markets to begin the week.

Pro Farmer: After the Bell Wheat Recap (source:CME)
Chicago wheat futures ended 1 1/2 to 16 1/2 cents higher, with the September through March 2013 contracts posting double-digit gains. Kansas City wheat finished mostly 7 to 11 cents higher. Minneapolis wheat posted gains of mostly 4 to 8 cents. Chicago wheat futures paced gains in the wheat market thanks to strength in the corn market. Traders are also concerned with crop prospects in the Former Soviet Union due to drought in key production countries.

Wheat Market Recap Report(source:CME)
September Wheat finished up 16 1/2 at 914 1/2, 5 1/4 off the high and 11 1/2 up from the low. December Wheat closed up 16 at 927 1/4. This was 10 1/2 up from the low and 6 off the high. September Chicago wheat traded sharply higher into the close with KC and Minneapolis following. Volume was slightly lower today but wheat managed to hang onto gains. Chicago wheat was supported by a strong corn market and off a warm and dry forecast for the Black Sea and Australia. Nearly a third of the Russian spring wheat crop will lack moisture this week and minimal rainfall is expected in Australian wheat growing areas over the next 10 days. East Russia domestic wheat prices rose last week signaling supply tightness and government officials announced that they would release additional intervention stocks to calm inflation fears. A well know banking institution announced that they expect the USDA to cut Russian wheat production to 42-43 million tonnes on the next USDA report. This is in line with market expectations. Export inspections for the week ending July 26th were reported at 18.60 million bushels vs. 11.64 for the week prior. Inspections needed per week to meet the current USDA estimate for the 2012/13 marketing year are 23.79 million bushels. Current inspections total 12.2% of the USDA estimate. Outside markets offered minimal resistance to wheat prices today as the US Dollar traded higher and US stocks were generally lower on the day. September Oats closed up 7 1/4 at 384 1/4. This was 2 1/2 up from the low and 3 1/2 off the high.

Pro Farmer: After the Bell Corn Recap (source:CME)
Corn futures ended slightly off session highs with gains of 17 to 21 1/2 cents in the September through July 2013 contracts. Far-deferred contract months posted gains the 9- to 12-cent range. Focus remains on the weather, with traders showing their disappointment with weekend rainfall by moving futures higher today. Traders expect the crop to continue to wither this week as there's little rain in the near-term forecast and above-normal temps are expected to stay around.

Corn, Soybean Conditions Decline as U.S. Drought Expands(Source:Bloomberg)
The condition of the U.S. corn crop worsened for an eighth straight week amid the worst Midwest drought in a generation. Soybean ratings also fell. About 24 percent of the corn was in good or excellent condition as of yesterday, down from 26 percent a week earlier and 77 percent in mid-May, the U.S. Department of Agriculture said today in a report. An estimated 29 percent of the soybeans got the top ratings, down from 31 percent. Both crops are in the worst shape for this time of year since a drought in 1988. “The damage has been done to the corn crop,” Peter Meyer, a senior director of agriculture commodities at PIRA Energy Group in New York, said by telephone today. “Now the weather is starting to become more of a factor in the soybean markets.” The worst of the drought occurred when corn plants were going through the critical pollination stage last month. Soybeans, which normally are planted later in the Midwest, are just now entering reproductive stages, so they have more time to grow.
Corn futures reached a record $8.1775 a bushel today on the Chicago Board of Trade and have surged 28 percent this month. Soybeans are up 15 percent in July. During the past week, little or no rain fell in parts of Iowa, Illinois and Nebraska, the largest corn-growing states, National Weather Service data show.

Corn Market Recap for 7/30/2012(source:CME)
September Corn finished up 21 1/2 at 820, 3 off the high and 20 1/4 up from the low. December Corn closed up 20 3/4 at 814. This was 19 up from the low and 3 3/4 off the high. December corn traded sharply higher into the close after posting a new all-time high. The sharply higher trade is linked to continued concern over the falling US corn yield. Private crop scouts have estimated the US corn yield near 118-122 bushels per acre. The market is likely trading a yield slightly higher than that but traders fear that the warmer than normal weather this week will cause increased yield loss in the western Corn Belt. Crop condition reports will be released this afternoon. The trade expects a 2% decline in corn good/excellent conditions. Export inspections for the week ending July 26th were reported at 21.44 million bushels vs. 19.59 million bushels in the week prior. This week's inspections continue to lag the needed pace of 36.11 million bushels to reach the 2011/12 USDA estimate. Current inspections are 88% of the USDA estimate for this crop year. Iowa ethanol processors posted their 3rd straight week of positive margins. As of July 27th, Iowa processors saw margins of.06 cents/bushel which was slightly lower than last week. A firmer DDG market and lower corn prices also offered some support today. Outside markets offered minimal resistance today, with the US Dollar mostly trading higher and US equities spending a lot of time in negative ground. September Rice finished up 0.235 at 15.835, equal to the high and 0.145 up from the low.

GRAINS-Soy jumps to 1-week top, new-crop corn hits contract high
SINGAPORE, July 30 (Reuters) - Chicago soybeans jumped to a one-week top while new-crop corn rose to a contract high as the worst drought in five decades continued to threaten crop yields across the U.S. grain belt with little relief expected this week.
"There is no weather relief this week as there are no rains in central and southeastern corn belt until the weekend and temperatures will remain above average," said Victor Thianpiriya, agricultural commodity strategist at ANZ.

Indonesia wheat flour consumption may rise 10 pct in 2012
JAKARTA, July 30 (Reuters) - Wheat flour consumption in Indonesia, Asia's top wheat importer, may increase 10 percent in 2012, the Indonesian Wheat Flour Producers Association said on Monday, as increasing wealth enables more consumers to shift away from rice.
Southeast Asia's largest economy may import as much as 6.8 million tonnes in 2012, compared to 6.2 million tonnes last year, association Chairman Francis Welirang told Reuters.

Thailand may adjust rice buying scheme for Oct crop-minister
BANGKOK, July 30 (Reuters) - Thailand may limit the amount of rice it buys from farmers or cap the money it pays per tonne for the October crop, the commerce minister said on Monday, in a bid to defuse criticism of a government intervention scheme aimed at helping the poor.
"We may limit the amount of rice we buy or put a ceiling on the money we pay to individual farmers," Minister Boonsong Teriyapirom told reporters, adding that the policy was being looked at to allow small farmers to benefit.

Australian wheat growers tap some, not all, of price spike
SYDNEY, July 30 (Reuters) - Australian wheat growers look set to miss out on the full benefits of a spike in prices on the back of the worst drought to hit the U.S. Midwest in more than 50 years after reducing plantings and selling stocks earlier in the year.
Led by a 55 percent spike in corn, global grain prices have soared as unrelenting heat across the U.S. Midwest over the past six weeks has destroyed crops, reducing yields in what was expected to be a bumper harvest.

Bangladesh to lift rice export ban to boost farmers
DHAKA, July 29 (Reuters) - Bangladesh is lifting a ban on rice exports to support farmers after record crops and bulging domestic reserves left prices below production costs, the finance minister said on Sunday.
Bangladesh, the world's fourth-biggest rice producer, banned overseas shipments of common varieties in May 2008 following a spike in prices and banned all exports a year later.

Drought slashes U.S. Midwest corn crop
OMAHA, Neb., July 27 (Reuters) - The most extensive U.S. drought in five decades has left corn plants withered and dying, and crop yields in the largest producing states will be much lower than experts have forecast, scouts said on Friday as they completed a U.S. Midwest crop tour.
The MDA EarthSat crop tour estimated a corn yield of a 118 bushels per acre after surveying 49 fields in Iowa, Illinois, Indiana and Ohio. That was sharply lower than a U.S. Agriculture Department estimate earlier this month of a yield of 146 bpa and a Reuters poll this week of 130.8 bpa.

Dry conditions affecting Argentine wheat crop - government
BUENOS AIRES, July 27 (Reuters) - Dry weather in some wheat-growing areas in Argentina has begun to affect the 2012/13 crop, which farmers have yet to finish planting, the Agriculture Ministry said on Friday in its weekly crop progress report.
The country is the world's No. 6 wheat exporter and the top supplier to neighboring Brazil. The government expects farmers to seed 3.8 million hectares with the grain this season, down from 4.6 million hectares last season.

Midwest crops, fish, water supply punished by US drought
CHICAGO/SCRANTON, Iowa, July 27 (Reuters) - Temperatures heading north of 100 degrees Fahrenheit and scarce rain portended another blistering weekend for much of the U.S. Midwest, where the most extensive drought since 1956 is devastating crops, evaporating rivers, and threatening to push world food prices higher.
Violent storms brought rain to the extreme eastern portions of the U.S. corn belt in Ohio on Thursday night, but moisture was sparse further west.

Corn highly variable in west Iowa, yields lower
SCRANTON, Iowa, July 27 (Reuters) - Corn yield potential appears highly variable in west-central Iowa, mirroring the ups and downs of production prospects in the central and eastern areas of the No. 1 corn and soy growing state, scouts on a U.S. Midwest crop tour said Friday.
Some plants suffering under the worst drought in 56 years were withered and dying, standing only 4 to 5 feet (1 to 1.5 m)tall with thin stalks and small ears.

Russia harvested 24.8 mln T of grains as of July 26 - ministry
MOSCOW, July 27 (Reuters) - Russia has harvested grain and legumes from 24.1 percent of the total target area, bringing in 24.8 million tonnes compared to 25.3 million tonnes a year earlier, harvest data published on Friday by Russia's Agriculture Ministry showed as of July 26.
Inclement weather in Russia's southernmost agricultural regions has slashed yields to 2.3 tonnes per hectare, it added.

India's monsoon stays weak as govt mulls drought steps
NEW DELHI, July 27 (Reuters) - India's monsoon rains are unlikely to pick up enough to avert the possibility that ministers meeting next week may officially declare a drought, which could prompt the government to offer more support for farmers to ensure adequate food supplies.
Rains from June 1 up to the end of the planting month of July are likely to be 21-22 percent below average, Farm Secretary Ashish Bahuguna said on Friday, unchanged from the seasonal shortfall recorded up to July 25.

SOFTS-Sugar nudges higher, weak monsoon supports
LONDON, July 30 (Reuters) - Raw sugar futures edged higher supported by key producer India's weak monsoon, while cocoa was steady and robusta coffee eased. Sugar futures were slightly higher in early trading, as a lack of rain in the world's second biggest producer India, was expected to cut the country's production prospects.

Chinese cotton stock policy to dominate in 2012/13 -Allenberg
July 27 (Reuters) - China's policy of buying and stashing large amounts of cotton in state reserves will dominate the market in the 2012/13 marketing season getting started on Aug. 1, the chief executive of the world's biggest cotton trader and merchant said on Friday.
Allenberg Cotton Co President and CEO Joe Nicosia told the Ag Market network's annual radio program from New York that "everything (in the cotton market) is dependent on the Chinese reserve policy."

OIL-Brent slips to $106 as stimulus expectations fade
LONDON, July 30 (Reuters) - Brent crude oil fell to around $106 a barrel, erasing early gains as hopes faded that the United States and Europe would soon announce measures to shore up their fragile economies, which could boost the outlook for oil demand.
"Speculation over central bank action looks like it has gone too far," said Carsten Fritsch, oil analyst at Commerzbank in Frankfurt. "The euro has already begun to retreat and oil has also started to weaken. The move upwards seems exaggerated."

Japan's Iranian crude imports jump in June from May
TOKYO, July 30 (Reuters) - Japan's crude oil imports from Iran in June rose 60.5 percent from May as refiners ramped up loadings before a halt in oil flows this month due to the imposition of sanctions on the Middle Eastern country.
Customs-cleared imports from Iran rose to 812,693 kilolitres (170,389 barrels per day) in June from 106,162 bpd in the previous month, Ministry of Finance data showed on Monday. Imports were down 33.9 percent from a year earlier.

Oil Trades Near Two-Day Low Before Central Banks Meet on Economy(Source:Bloomberg)
Oil traded near the lowest closing price in two days in New York before central bank policy makers meet to discuss the economy and ahead of a report that may show crude imports fell in the U.S. Futures were little changed, heading for the first monthly gain in three. Prices slid for the first time in five days yesterday as economic confidence in the euro area dropped to the lowest level in almost three years. The European Central Bank and the U.S. Federal Reserve hold separate meetings this week, with ECB President Mario Draghi pledging to do whatever it takes to preserve the euro. Crude purchases by the U.S. probably dropped in the seven days ended July 27, a Bloomberg News survey showed before an Energy Department report tomorrow.
“Oil, like a lot of markets, is parked, waiting for the outcome of the ECB meeting,” said Ric Spooner, a chief market analyst at CMC Markets in Sydney. “The market has taken quite a leap of faith and run up based on Draghi’s statements of intent so we’ll be looking for some detail which confirms that.” Oil for September delivery was at $89.58 a barrel, down 20 cents, in electronic trading on the New York Mercantile Exchange at 11:07 a.m. Sydney time. The contract yesterday dropped 0.4 percent to $89.78, the lowest close since July 26. Prices are up 5.4 percent this month and 9.4 percent lower this year.

Copper Drops on Economic Concerns Before Central Bankers Meet(Source:Bloomberg)
Copper fell for the first time in four sessions as investors awaited signals from central banks this week on bolstering the faltering global economy. European Central Bank President Mario Draghi is attempting to build consensus for a plan to ease euro-area borrowing costs amid the region’s debt crisis. Federal Reserve policy makers meet before a U.S. employment report that may show the pace of hiring in July failed to reduce the jobless rate. “A lot of people are taking a wait-and-see attitude ahead of the meetings and the payrolls report,” Adam Klopfenstein, a market strategist at Archer Financial Services Inc. in Chicago, said in a telephone interview. “Copper will rally if we get an agreement out of Europe, but the market needs to see it. The table is set, but they’re waiting for the meal to be served.”
Copper futures for September delivery declined 0.3 percent to settle at $3.416 a pound at 1:14 p.m. on the Comex in New York. The metal rose 2.2 percent in the previous three sessions in the longest rally since mid-June. A Labor Department report on Aug. 3 is expected to show U.S. payrolls increased by 100,000 workers, according to the median forecast of economists surveyed by Bloomberg News. Unemployment is projected to hold at 8.2 percent.

Most-Accurate Gold Forecasters Splitting After Rout: Commodities(Source:Bloomberg)
The only three analysts to correctly predict gold’s biggest quarterly slump in four years are now split, reflecting investors’ diverging views on the probability of central banks doing more to shore up growth. Justin Smirk of Westpac Banking Corp., the most accurate of 20 analysts tracked by Bloomberg in the second quarter, says prices will keep dropping. Eugen Weinberg of Commerzbank AG and Nick Trevethan at ANZ Banking Group Ltd. predict a record within a year. Hedge funds and other speculators are the least bullish since 2008, even with investor holdings of physical bullion in exchange-traded products close to an all-time high, government data and figures compiled by Bloomberg show.
While gold has rallied since tumbling to within 1 percent of a bear market in May, it’s still 16 percent below the record $1,923.70 an ounce reached on Sept. 6. Investors have favored sovereign debt and the dollar to protect their wealth as economic growth slows, driving yields to record lows and the U.S. currency to a two-year high. Central banks from Europe to China cut interest rates this month, and the Federal Reserve said it was prepared to act to boost the recovery. “There is not much interest in gold right now given the fears of economic slowdown globally,” said Michael Cuggino, who manages $17 billion of assets at Permanent Portfolio Funds in San Francisco, with about 20 percent of his investments in gold. “The velocity of the money has not yet entered the system, but one has to buy gold as it is a long-term play and will keep rising as you need insurance against future inflation.”

July Cargoes on Panamax Ships Slump as China Coal Demand Falls(Source:Bloomberg)
The number of cargoes booked on Panamax bulk carriers, the largest to transit the Panama Canal, slumped 33 percent in July amid slowing Chinese imports of thermal coal, used for power stations, Morgan Stanley said. There were 151 new cargoes reported for Panamax ships in July, compared with 224 for the same period 12 months ago and 174 in each of the previous two months, according to an e-mailed report today from Morgan Stanley analysts including New York- based Fotis Giannakoulis. Monthly bookings, known as fixtures in the industry, gained for the larger Capesize vessels in July compared with the previous two months, even as rates to hire the ships slumped. “Panamax fixtures continue to decline as China’s thermal coal demand is softening,” the U.S. investment bank said in the report, citing a slowing economy and growing hydropower output. “The weakness of the freight market is rapidly moving towards the smaller vessels that until recently seemed decoupled.”
The Baltic Dry Index, a measure of commodity freight costs for four vessel sizes, dropped 1.9 percent to 915, the lowest since June 14, according to the Baltic Exchange. The London- based exchange assesses freight costs on more than 50 international maritime routes. Average Panamax hire costs slid 2.1 percent to $8,054 and are 42 percent lower than 2012’s high on April 27, data show. U.S. grain and soybean exports, which usually begin to surge in October, will be reduced due to an ongoing drought, extending weakening demand for smaller bulk carriers, according to the report.